TaxTMI 
TaxTMI 
2017 (11) TMI 1676
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....e u/s 194C(2) of the IT Act." 3.2 Appeal No.215/2016 admitted on 2.5.2017 "Whether on the facts and in the circumstances of the case and in law the ITAT has erred in deleting the addition of Rs. 8326631/- u/s 40(a)(ia) of the Act considering that assessee was not liable to deduct the tax at source u/s 194C(2) of the IT Act." 4. The facts of the case are that the assessee is a transporter contractor filed its return on 31.3.2009 declaring total income of Rs. 3,68,633/-. The case was scrutinized u/s 143(3) of the Income Tax Act, 1961. The assessee is an indivisual and enjoys income from commission agency in the name and style of M/s. Sikar Ludhiyana Road Lines. During the assessment proceeding written submissions were filed and books of account were produced, which were examined on test check basis by the Assessing Officer. 5. Counsel for the appellant has taken us to the order of the AO wherein AO has observed as under:-' "3.1 The counsel of appellant has argued that he had filed Form No.15-I from the various truck owners before the AO. In this regard, the undersigned called for the assessment records of AY 2008-09 and on examination, it was found that For....
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....d in the office of Addl. CIT, Range-4, Jaipur. The appellant is therefore guilty of filing fabricated/forged document during the course of appellate proceedings. The addition evidence filed by the appellant is therefore rejected as it has been forged with the sole intention of fraud and evading taxes." 5.1 He has also taken us to the order of the CIT(A) and contended that AO after taking into consideration the facts of the case has added income u/s 40(a)(ia) to the tune of Rs. 87,97,747/-. 5.2 Counsel for the appellant has relied upon the decision of this court in Shree Choudhary Trasnport Company vs. Income Tax Officer reported in (2009) 225 CTR Reports wherein it has been held as under:- 2. In our view, on the language of Sectin 194C(2), and the fact that the goods received were sent through truck owners by the appellant, and there was no privity of direct contract between the truck owners and the cement factory. According to the contract between the appellant and the cement factory, it was the appellant's responsibility to transport the cement, and for that the appellant hired the services of the truck owners, obviously as sub-contractors. In that view of the ....
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.... Mr. Jhanwar has taken us to the provision so Section 194(c) read with 204(iii) and contended that the amount of Annexure-9 is deducted completely on the payment which is required to be made and if the complete amount is not shown in the books of account and corresponding debit in the books of accounts it will not reach to any final decision to match. The Tribunal rightly observed in its judgment which reads as under:- "Thus we concur with the contention of Ld.A.R. that when payment of freight was made by Mangalam Cement Ltd. directly to the truck owners, it was not possible for the assessee to make any deduction and payment of tax thereupon. The assessee had only received handling charges and all other acts and obligations were carried out by Mangalam Cement Ltd. as such neither these was any obligation on the part of the assessee nor was it possible for the assessee to make any deduction of tax thereupon. We thus do not find justification in the observation of the Ld. CIT(A) that Mangalam Cement Ltd. was making payment to truck owners only on behalf of the assessee and assessee was a contractor and the truck owner were subcontractors. If there were lapses in making TDS b....
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.... of good quality from the above mines of M/s. R.S.M.M. Ltd. to our works at Morak. Regarding quantity to be transported we will inform to you from time to time. 2. We will inform you about the road freight from the mines of R.S.M.M. Ltd to our works at Morak from time to time as per the prevailing rate of market and availability of trucks. 3. We shall pay you Rs. 20/- perr tonne as handling charges for arranging the trucks for transportation of Gypsum on our behalf. Service tax will be paid by the company, if applicable and ITDS will be deducted as per Income Tax Rules. 4. Freight will be paid after unloading the material at our factory at Morak to the truck's driver or to the transporter or their authorised agent as the case may be. TDS as applicable will be deducted from freight bills as per the Income Tax Rules. 5. You will raise your bills on the basis of monthly receipt at our works and the same will be paid to you within 15 days from the date of receipt of the same. 6. All Trucks will bring necessary transit papers i.e., challan, Mines Rawanna L.R. etc, failing which the trucks will be returned to you at your risk and cost....